Business

Fred Wilson: Yahoo Will Put Tumblr on Same Level as Facebook, Twitter

One of Tumblr's earliest investors, venture capitalist Fred Wilson, says the Yahoo deal will lead to an influx of advertising on the platform and bring it to the level of Facebook and Yahoo in advertisers' minds.

"Tumblr has been pushing their native advertising system into the marketplace for the past year," Wilson told interviewer John Battelle Tuesday at the CM Summit in New York. "It's a beautiful system. They say to a marketer, 'Create a Tumblog. Post what you want to the Tumblog and that could be imagery, it could be video it could be GIFs, it could be anything and then we will allow you to promote that throughout the community, much like the way Twitter does.'"

Wilson said that marketers haven't been very receptive to the pitch. "They say, 'We're already doing it with Facebook, we're already doing it with YouTube, we're already doing it with Twitter... How many more do we have to do?' So it's been hard for Tumblr. They're making good progress. I'm not suggesting that they wouldn't get there on their own. But Yahoo has those relationships. They have big budgets from those marketers and for them to say, 'Why don't you take $10 million from your budget and stop buying banners and start buying native promoted content inside Tumblr, that's huge for Tumblr. That's going to get them parity with Facebook, Twitter and YouTube in marketers' mindsets in a way that they would not have ever gotten on their own."

Wilson, whose firm Union Square Ventures invested $350,000 in Tumblr in 2007, also said that Yahoo CEO Marissa Mayer realized that the company lacked a social media presence and couldn't create one from scratch. "They had a gaping hole in their product portfolio," he said of Yahoo.

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